Monday, May 2, 2011

Hold the Line Silverbugs! *Updated

Silver has taken a carnival ride over the weekend. At it's worst point, it was down nearly 15% at 43.00 bucks.

I am not too worried about it. Fundamentally, nothing in the economic world has changed. The exchange raised margin requirements twice last week- forcing paper silver players to prove they have the cash to take delivery and that has shaken out some longs. That and we were due for a correction. I am glad people have taken some profits here.

Do you know what a high, tight flag is?

It is a rare chart phenomenon that I used to look for when trying to screen equities I would invest in- years ago. A high tight flag on a chart, with significant volume, indicated a stock that was about to take off. This pattern was nearly foolproof. In fact, I sometimes traded on a vertical run up and flag pattern alone. The high tight flag usually occurred in conjunction with specific (good) news. It was almost always a winning move. Usually.

Tight versus loose flag

I saw that pattern develop in silver over the past few weeks. It was interesting to note and I am somewhat reluctant to apply equity charting to PM charting. Particularly in the short term. However, I am still very confident. Very bullish. I will buy physical on weakness- sorry I missed the sub 45 sale over the weekend.

* Update, 330 PM MST. A 10% trashing in paper silver. Glad I'm in physical....

The CME hiked margin for the third time in three days and is doing anything it can on behalf of the criminal bankers that have shorted silver. If they are going to do that shit to the long traders then we should have position limits for the short side. Fucking crooks. More here.

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